Tools that multinationals can use to help them reduce the risks inherent in making investments in foreign countries include:

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All three options (options, hedges, and swaps) are useful tools that multinationals can use to mitigate risks when doing business in foreign countries. Options give the buyer the right but not the obligation to buy or sell a certain currency at a set price and time, while hedges involve taking an equal and opposite position to the investment to reduce risk. Swaps allow two parties to exchange currencies for a certain period of time. All of these tools help multinationals to limit their exposure to currency and other risks, which can ultimately impact their profitability and overall success.

Tools That Multinationals Can Use to Help Them Reduce the Risks